The changes, originally proposed in January, would limit foreigners to holding no more than 49% of the shares or voting rights in Thai companies.
The original proposal would have punished violators with only a fine of up to 100,000 baht ($2,870) but the revised version raised the fine five-fold and also threatens five years in prison, according to Commerce Minister Krirk-Krai Jirapaet.
Companies would also have three years rather than two to adjust to the new regime, he said.
"The cabinet agreed to raise the penalty for violations both in fines and imprisonment. Those who violate the law would face five years in prison and fine of five times the amount in the earlier draft," he said.
"We added the criminal penalty in order to promote good corporate governance in the business sector," Krirk-Krai said.
He said the draft would be submitted to parliament before Friday. "I personally believe that the amendment will not affect foreign investment in Thailand or investor confidence because direct investment usually focuses on the rate of return and the investment opportunity," he said.
The latest draft still needs approval from the military-installed parliament before taking effect.
The original proposal drew widespread complaints from foreign investors here who warned that new investment could be switched to neighbouring countries with fewer restrictions.
The bill also allows for broad exemptions, including the service sector, which is governed by a separate law. Companies operating under bilateral trade deals would also be exempt. However, the international business community has warned that the changes would dampen the investment climate in Thailand, where confidence has already suffered due to a series of abrupt policy changes.
The World Bank last week also warned about the impact of the amendments and suggested that the rules be liberalised.
Invest in Thailand, get on the wrong side of the political divide, and go to jail.
3 comments:
"We added the criminal penalty in order to promote good corporate governance in the business sector," Krirk-Krai said.
I am sure it will promote something quite different to this. I am sure it will promote foreign investment to Vietnam.
This is very difficult to understand. It does seem the Thai nation has collectively decided that all foreigners are unwelcome. I think a move back from whence I came is overdue for consideration.
I have no problem with a prison sentence as a penalty if the rules are transparent & consistently enforced.
hobby, hi. But they arent and they wont ber. Same as the proposed new law to ban the use of mobiles while driving. Just another law for the police not to enforce. Or worse, to selectively enforce.
The old FBA was just fine, except the Thais chose not to enforce it and where there is discretion there is the opportunity for corruption. This will be no different.
It is hard to tell whether their incompetence in drafting and enforcing laws is deliberate in order to facilitate corruption or is indeed merely incompetence. Either way it isng going to change and you notice that foreigners (as always) will be the ones blamed.
Carter
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